Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/251107
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2021
Series/Report no.: 
EERI Research Paper Series No. 03/2021
Publisher: 
Economics and Econometrics Research Institute (EERI), Brussels
Abstract: 
We introduce a military sector and external security considerations into a real-businesscycle setup with a public sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2018). We investigate the quantitative importance of the presence of a military sector and external threat considerations for the cyclical fluctuations in Bulgaria. We find the quantitative effect of such aspects to be very small, and thus not important for business cycle stabilization, or public finance issues, as in Bulgaria the spending on military is relatively small relative to the size of the economy.
Subjects: 
business cycles
military spending
security considerations
external threats
Bulgaria
JEL: 
E24
E32
Document Type: 
Working Paper

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